One of the reasons is that the phones themselves are too advanced for anyone else's infrastructures and capabilities. I knew they were years ahead of the rest of the world, but didn't realize just how much:

[Japan's] cellphones set the pace in almost every industry innovation: e-mail capabilities in 1999, camera phones in 2000, third-generation networks in 2001, full music downloads in 2002, electronic payments in 2004 and digital TV in 2005.

E-mail in 1999? That is bonkers. Apparently this conundrum has a name – Galápagos syndrome. Japan’s cellphones are like the endemic species that Darwin encountered on the Galápagos Islands — fantastically evolved and divergent from their mainland cousins — explains Takeshi Natsuno, who teaches at Tokyo’s Keio University. The only Japanese handset manufacturer that's been able to significantly move into other markets is Sony, largely because of its partnership with Swedish manufacturer Ericsson.

Another big reason for this stunted global growth is that Japanese handset hardware is what seems to get the most resources and attention – bar code readers, credit card chips, electronic built-in car keys, facial recognition, etc. This seem to put the focus on the entire experience within the handset itself, rather than how it can be used as a tool to receive information from other places.

For instance, connecting a phone to a computer is a foreign concept to them, which is one of the reasons the iPhone did so poorly in its launch there. Coincidentally, this Wall Street Journal article from today talks about Apple's and RIM's successes over other brands because of services, software and data packages. "The two accounted for only 3% of all cellphones sold in the world last year but 35% of operating profits." Guess they were onto something all along.

I wonder if Japanese manufacturers could find a way to merge their innovations and vision in hardware with other company's software advancements. Can you imagine a Japanese phone with Apple's software/services, or something like that (one can dream)? It would be even more bonkers than mobile e-mail in 1999. The NYTimes quotes Natsuno's recommendation: "Japan’s handset makers must focus more on software and must be more aggressive in hiring foreign talent, and the country’s cellphone carriers must also set their sights overseas." What do you think?